Atticus takes stake in Barclays, opposes ABN buy

SAN FRANCISCO (MarketWatch) -- New York hedge-fund firm Atticus Capital LP has acquired shares of Barclays PLC and met with the bank to discuss whether it should drop its effort to buy ABN Amro Holding NV in a bid valued at $85.1 billion, according to a media report Sunday.

It comes as shareholders across Europe are increasingly targeting companies and pushing them to change strategy, The Journal said.

London hedge fund The Children's Investment Fund Management LLP, known as TCI, helped spark the takeover fight for ABN with its February letter demanding that the Dutch bank consider breaking itself up, according to the report.

Barclays's
BCS, -2.62%
bid followed, as did a competing offer from a consortium of other European banks led by Royal Bank of Scotland Group PLC (RBS).

According to people familiar with the situation, Atticus has told Barclays officials that Barclays stock is undervalued and that if the bank dropped its bid, Barclays stock would rise, according to the report.

"The views expressed by Atticus Capital LP are not representative of the feedback we have received from shareholders who remain supportive of our strategy," Barclays said in a statement. "If other shareholders feel differently, we encourage them to engage in a dialogue with us. We believe this transaction will create significant incremental value for our shareholders and meets our rigorous financial criteria."

It isn't clear what stake the hedge fund owns in Barclays, The Journal said, adding that one unnamed person familiar with the transaction estimated the stake at about $1 billion, which would represent a stake of roughly 1%.

ABN has operations in mature and emerging markets that Barclays is eager to tap, the Journal said, including Italy, Brazil, and India, and other Asian nations.

Atticus, a $15.5 billion firm, is run by Tim Barakett, according to the report, which added that last year, the firm's two flagship funds each rose about 40% after fees, compared with gains of about 14% for the Standard & Poor's 500-stock index. The fund typically makes concentrated bets.

Atticus's investments also have included the U.S. railroad industry, mining stocks, and Deutsche Boerse AG where it pushed the Frankfurt stock-exchange operator to drop its efforts to buy the London Stock Exchange in 2005.

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